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09-09-1996 EDA MIN e MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, SEPTEMBER 9, 1996 Members Present: President Gongoll. Commissioners Bender. Scheel. Farber. Duitsman. Dwyer and Holmgren Members Absent: None Staff Present: Paul Steinman. Executive Director; Pat Klaers. City Administrator. and Debbie Kleckner. Recording Secretary 1. Call Meetina To Order Pursuant to due call and notice thereof. the meeting of the Elk River Economic Development Authority was called to order at 6:07 p.m. by President Gongoll. 2. Consider Aaenda COMMISSIONER HOLMGREN MOVED TO APPROVE THE 9/9/96 EDA AGENDA. COMMISSIONER BENDER SECONDED THE MOTION. THE MOTION CARRIED 7-0. e 3. Consider EDA Consent Aaenda COMMISSIONER FARBER MOVED TO APPROVE THE EDA CONSENT AGENDA AS FOLLOWS: 3.1. AUGUST 12.1996. EDAMINUTES -- APPROVED 3.2. EDA CHECK REGISTER -- APPROVED COMMISSIONER BENDER SECONDED THE MOTION. THE MOTION CARRIED 7-0. 4. Open Mike No one appeared for this item. 5. Discussion - Business Incubator Proaram Paul Steinman explained staff has been working with the Sherburne County Board for use of the former county administration building. and a private property owner for a business incubator facility. e County Administration Buildina Staff. Pat Dwyer. and Harlan Jacobs of Genesis Business Centers met with the County Board on September 3. 1996. to consider the EDA leasing the former administration building. The EDA would lease the building from the County for: an amount that would cover operating costs of the facility. The EDA would then sublease to potential business incubator EDA Meeting Minutes September 9,1996 Page 2 e tenants. A tour by the EDA Commissioners of the Columbia Heights incubator is planned for Tuesday, September 24, 1996. Private Property City staff is also working with a private property owner to lease 10.000 - 15.000 square feet of space to the EDA. Paul explained the focus of the EDA business incubator program is to lease inexpensive space for a minimum of two years. filling the space with start-up companies. It is projected that the start-up companies could sublease the space at a rate to cover the EDA's costs. Paul noted Harlan Jacobs is aware of approximately a dozen possible tenants at this time. If the rental rate did not cover the EDA lease, the EDA would be required to guarantee the operating costs to either the County or private property owner. Options for recovering costs were discussed such as obtaining shares in a business, or a loan that could be converted to stock at any time at a pre-negotiated price. ~ Paul outlined the EDA' s responsibilities in the business incubator project, as follows: . e . Guarantee coverage of operating costs including taxes . Responsibility for leasing and managing the facility . Show on-going creation of 15-25 jobs . Provide technical expertise and services to tenants . Provide guaran1ees that growth of incubator businesses occurs within Elk River. or within Sherburne County, in the case of leasing the former administration building Square foot costs and projected expenses for a business incubator project were reviewed, as detailed in staff's memo to the EDA; Scenario A being the former administration building and Scenario B. a 10-15.000 square foot private property facility . 3 major issues associated with the business incubator program are under consideration by the city's legal counsel, Dave Sei:ergren, including a master lease between the EDA and property owner, sub-lease between the EDA and tenants, and a management contract between the EDA and Genesis Business Centers. In addition, Paul noted that business incubator program guidelines need to be established to identify the purpose and parameters of the program, the interview and selection process, and the types of businesses that would be allowed in the business incubator program. Discussion followed regarding tenants for a business incubator facility. Paul indicated one of the tenants in the Columbia Heights incubator is interested in relocating to Elk River. e Commissioner Dwyer indicated the County Board appeared receptive to the EDA's proposal to lease the former administration building. Paul felt the board might be agreeable to providing the same level of services they presently do, such as mowing, snow removal and garbage service. EDA Meeting Minutes September 9, 1996 Page 3 e Commissioner Duitsman felt EDA funds should be used initially to fund the program; however, the Council may be open to providing financial support if needed. He stressed the importance of the Strategic Planning Committee in locating space for "graduating" business incubator tenants. Paul discussed the need for contact between the private developer sector and the business incubator tenants to plan for future growth of their businesses within Elk River or Sherburne County. 6. Resolution 96-5 Decertifvina TL Feedina TIF District COMMISSIONER DWYER MOVED APPROVAL OF RESOLUTION 96-5, A RESOLUTION DECERTIFYING TAX INCREMENT FINANCE DISTRICT NO. 13 (lL FEEDING PROJECT). COMMISSIONER BENDER SECONDED THE MOTION. THE MOTION CARRIED 7-0. 7.1. Strateaic Plannina Paul noted the following will serve on the Strategic Planning Task Force: e . Jeff Gongoll - EDA . Jim Simpson - Bank . Jackie Schuelein - Chamber . Duane Kropuenske - HRA . George Zabee - Utilities . Dick Gongoll - Bank . Rich Duggan - Chamber . Tom Bender - EDA . Larry Farber - Council . Hank Duitsman - Mayor . Paul Ammerman - Chamber Staff representatives will include Paul Steinman, Director of Economic Development: Pat Klaers, City Administrator; and Bryan Adams, Elk River Utilities Manager. The first meeting will be held on Wednesday, October 16,1996, from 3 - 8 p.m., at the Riverwood Conference Center. 7.2. Mall/Snvder's Paul indicated there is currently only one prospect at this time for the Elk River Mall. Staff will meet with Mr. Sheedy, leasing agent for the mall, on September 11, 1996. Three prospects for the Snyder's building have approached staff regarding the micro loan program. 7.3. Sustainable City e The steering committee for the Sustainable City Energy Showcase has been named the Action Committee for Energy, or ACE. ACE will provide the formal direction for the Sustainable City program in Elk River and includes individuals from Minnegasco, NSP, Honeywell, Andersen Windows, and local businesses. ACE will be under the MEI/City partnership and has four subcommittees including Energy Use, Economic Development. Demonstration Sites, and Marketing. A kick-off meeting for the Sustainable City project will be held at UPA e e e EDA Meeting Minutes September 9, 1996 Page 4 on October 8, 1996, at 10:00 a.m. The governor and lieutenant governor have been invited to attend, as well as Hazel O'Leary, Secretary of Energy. Chair Gongoll suggested the business incubator program be presented to this group. 7.4. Prospects Paul noted staff is working with two prospects for a site in the Business Park. One is a private Minneapolis-based development company, and the other is a developer/business owner in another community. Discussion followed regarding the concept of the EDA constructing a building and leasing it out. Further discussion followed regarding issuing revenue bonds to finance construction of a building vs. the EDA owning and leasing. It was the consensus of the EDA Commissioners to further investigate this option. 7.5. Anoka-Sherburne County Capital Fund Investor Meetina Paul indicated he is working with the Sherburne County Economic Development staff to set up a meeting of possible Sherburne County banks and utility companies to invest in the Anoka/Sherburne County Capital Fund. Paul explained this fund could provide financing for the city's Business Incubator Program. 8.1. Statement of Financial Activity for EDA Julv and Auaust Information item for EDA Commissioners. 9. Adiournment There being no further business, COMMISSIONER HOLMGREN MOVED TO ADJOURN THE MEETING. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 7-0. The meeting of the Elk River Economic Development Authority was adjourned at 6:45 p.m. ;a;;b~ Debbie Kleckner Recording Secretary